Sunday, September 22, 2013

The bills that came after Obama's proposal were largely consistent with
the proposal, but contained some additional provisions and differences
in implementation.

The Volcker Rule was not included in Obama's
initial June 2009 proposal, but Obama proposed the rule later in January
2010, after the House bill had passed. The rule, which prohibits
depository banks from proprietary trading (similar to the prohibition of
combined investment and commercial banking in the Glass--Steagall Act)
was passed only in the Senate bill, and the conference committee enacted
the rule in a weakened form, Section 619 of the bill, that allowed
banks to invest up to 3% of their Tier 1 capital in private equity and
hedge funds as well as trade for hedging purposes.

The initial
version of the bill passed the House along party lines in December by a
vote of 223--202,[1] and passed the Senate with amendments in May 2010
with a vote of 59--39[1] once again along party lines.[1] The bill then
moved to conference committee, where the Senate bill was used as the
base text[17] although a few House provisions were included in the
bill's base text.[18]

One provision on which the White House did
not take a position[19] and remained in the final bill[19] allows the
SEC to rule on "proxy access" -- meaning that qualifying shareholders,
including groups, can modify the corporate proxy statement sent to
shareholders to include their own director nominees, with the rules set
by the SEC. This rule was unsuccessfully challenged in conference
committee by Chris Dodd, who -- under pressure from the White House[20]
-- submitted an amendment limiting that access and ability to nominate
directors only to single shareholders who have over 5% of the company
and have held the stock for at least two years.[19]

The "Durbin
Amendment"[21] is a provision in the final bill aimed at debit card
interchange fees and increasing competition in payment processing. The
provision was not in the House bill;[14] it began as an amendment to the
Senate bill from Dick Durbin[22] and led to lobbying against it.[23]
The law applies to banks with over $10 billion in assets, and these
banks would have to charge debit card interchange fees that are
"reasonable and proportional to the actual cost" [24] of processing the
transaction. The bill aimed to restrict anti-competitive practices and
encourage competition, and included provisions which allow retailers to
refuse to use credit cards for small purchases and offer incentives for
using cash or another type of card.[14]

The Durbin Amendment also
gave the Federal Reserve the power to regulate debit card interchange
fees, and on December 16, 2010, the Fed proposed a maximum interchange
fee of 12 cents per debit card transaction,[25] which CardHub.com
estimated would cost large banks $14 billion annually.[26] On June 29,
2011, the Fed issued its final rule, which holds that the maximum
interchange fee an issuer can receive from a single debit card
transaction is 21 cents plus 5 basis points multiplied by the amount of
the transaction.[27] This rule also allows issuers to raise their
interchange fees by as much as one cent if they implement certain
fraud-prevention measures.[27] An issuer eligible for this adjustment,
could therefore receive an interchange fee of as much as 24 cents for
the average debit card transaction (valued at $38),[27] according to the
Federal Reserve. This cap—which took effect on October 1, 2011, rather
than July 21, 2011, as was previously announced—will reduce fees roughly
$9.4 billion annually, according to CardHub.com.[26] As a result of the
government limiting their revenue from interchange fees, banks made
plans to raise account maintenance fees to compensate.[28]

The
New York Times published a comparison of the two bills prior to their
reconciliation.[29] On June 25, 2010, conferees finished reconciling the
House and Senate versions of the bills and four days later filed a
conference report.[1][30] The conference committee changed the name of
the Act from the "Restoring American Financial Stability Act of 2010."
The House passed the conference report, 237--192 on June 30, 2010.[31]
On July 15, the Senate passed the Act, 60--39.[32][33] President Obama
signed the bill into law on July 21, 2010.

Friday, September 20, 2013

Is MasterCard a Buy, Hold, or Sell?

MasterCard has delivered fortunes to its investors, rising more than
1,400% since its IPO in 2006. But is MasterCard still a buy today, even
at the price of about nearly $700 per share?

In this video,
Motley Fool analysts Joe Tenebruso and Eric Bleeker discuss a massive
global opportunity that lies ahead for MasterCard. And they offer up two
other great businesses that investors may wish to consider as
additional ways to profit from the cash-to-plastic megatrend.

Tuesday, September 3, 2013

Credit cards are both an opportunity and a risk... approach them wisely!
"Making smart decisions about credit, on the other hand, isn't
difficult and can improve your credit scores, help you land a job and
provide welcome relief in an emergency." Via MSN Money. Watch the video
and find out what John Iadarola and Lisa Ferguson think on TYT
University! Part #2 will be along in just a couple of days with more
tips for you!

What do you think about our credit card and finance
tips? Do you currently have a line of credit? Are you being financially
responsible with it? Do you have more tips for us? Let us know what you
think down below!